Lewis signed a contract for the rights to all timber located on Nine-Mile Mine. He agreed to pay $70 per thousand board feet ($70/mbf). As he began work, Nine-Mile became convinced that Lewis lacked...

Matilda owns a condominium on the beach in Rehoboth, Delaware. During the current year, she incurs the following expenses related to the property: Mortgage interest ...... $8,000 Property taxes...

At the beginning of the tax year, Barnaby's basis in the BBB Partnership was $50,000, including his $5,000 share of partnership debt. At the end of the tax year, his share of debt was $8,000. His...

Eagle Company contracts to build a house for Frank. The contract states that any assignment of this contract renders the contract void. After Eagle builds the house, but before Frank pays, Eagle...

All America Export Import Corp. (All America) placed an order for several thousand pounds of yarn with A. M. Knitwear (Knitwear). On June 4, All America sent Knitwear a purchase order. The purchase...

Polygram, a French company, made records, tapes, and CDs. 32-03, a New York distributor, ordered goods from Polygram that were delivered in four shipments with written invoices. The invoices noted...

Mark Bradshaw, an agent for National Foundation Life Insurance Co. (NFLIC), tried to sell a health insurance policy to Bobby Reed. Bradshaw told Reed that his health insurance coverage would begin...

Ray steals a purse from an unattended car at a gas station. Because the purse contains money and a handgun, Ray is convicted of grand theft of property (cash) and grand theft of a firearm. On appeal,...

In its 2001 annual report, investors of Adelphia Communications were startled to find a footnote in its financial statements that reported the company had guaranteed as much as $2.7 billion in loans...

Jesse worked as a buyer for the Vegetable Co. Rachel offered to sell Jesse 10 tons of tomatoes for the account of Vegetable. Jesse accepted the offer. Later, Jesse discovered that Rachel was an agent...

Gilbert Church owned Church Farms, Inc., in Manteno, Illinois. Church advertised its well-bred stallion Imperial Guard for breeding rights at $50,000, directing all inquiries to Herb Bagley, Manager....

Suppose that Trent and Xavier discover that Brad took the idea of Hallowed and sold it to the company that produced Halo 2. Which type of intellectual property issue does this raise? Two computer...

Imagine that you are the independent auditor of Midisoft. The audit plan specifies specific testing procedures to assess the fair representation of the Sales and Allowances and Accounts Receivable...

Cougar, Inc., is a calendar year S corporation. Cougars Form 1120S shows nonseparately stated ordinary income of $80,000 for the year. Johnny owns 40% of the Cougar stock throughout the year. The...

Alan Waung, a Hong Kong businessperson, purchased a golf course in Saginaw, Michigan, as an investment. As an avid golfer, Alan anticipates spending several weeks during the year at his "Northern...

Owen telephones an order to Hillarys store for certain goods, which Hillary delivers to Owen. Neither party says anything about the price or payment terms. What are the legal obligations of Owen and...

State whether the following provisions in a note impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with either the word...

J. C., Inc., had a franchise agreement with McDonalds Corp to operate McDonalds restaurants in Lancaster, Ohio. The agreement required J. C. to make monthly payments of certain percentages of the...

Prepare a project plan for implementing the six-step data-driven approach. List the types of team members who should be involved in each step, how long each step will take, and cost estimates for...

Twin Creeks Entertainment signed a deal with U.S. JVC Corp. in which JVC would buy 60,000 feature-film videocassettes from Twin Creeks over a three-year period. JVC intended to distribute the...

Edith's warehouse (adjusted basis of $450,000) is destroyed by a hurricane in October 2014. Edith, a calendar year taxpayer, receives insurance proceeds of $525,000 in January 2015. Calculate Edith's...

Samuel Reese sold 1,000 shares of his stock in Maroon, Inc., an S corporation. He sold the stock for $15,700 after he had owned it for six years. Samuel had paid $141,250 for the stock, which was...

You are a CPA working for a local firm and have been assigned the 2011 tax return of Bobby Crosser. In going over the data that Bobby gave the firm, you are surprised to see that he has reported no...

Carmin Kovach is single and has two children from her previous marriage. Anika, 9, lives with Carmin. Julius, 11, lives with his father, Ray. Carmin pays alimony of $400 per month to Ray. The...

Aleris International, Inc., signed a contract to buy a John Deere loader from Holt Equipment Co. The agreement provided that despite physical delivery of the equipment, title shall remain in the...

How could a check made out to Joseph Klimas and his Attorney Fritzshall & Gleason & Blue Cross Blue Shield Company and Carpenters Welfare Fund be negotiated further? What would be required? [Chicago...

Farrokh and Scheherezade Sharabianlou signed a purchase agreement to buy a building owned by Berenstein Associates for $ 2 million. They deposited $ 115,000 toward the purchase. Before the deal...

Zeke, who sells lawn mowers, tells Stasio, a regular customer, about a special promotional campaign. On receipt of a $50 down payment, Zeke will sell Stasio a new Universal lawn mower for $200, even...

Which, if any, of the following crimes necessarily involves illegal activity on the part of more than one person? (a) Bribery. (b) Forgery. (c) Embezzlement. (d) Larceny. (e) Receiving stolen...

Would a court be likely to decide that the transaction between Holcomb and TCG was covered by the Uniform Commercial Code (UCC)? Why or why not?

Richard Pawlus was an owner of Dutch City Wood Products, Inc., which did business as Dutch City Marketing. Pawlus purchased merchandise from Rothschild Sunsystems from April 24 to June 24 using the...

Jones, a farmer, found an odd-looking stone in his fields. He went to Smith, the town jeweler, and asked him what he thought it was. Smith said he did not know but thought it might be a ruby. Jones...

Roy Supply, Inc., and R. M. R. Drywall, Inc., had checking accounts at Wells Fargo Bank. Both accounts required all checks to carry two signaturesthat of Edward Roy and that of Twila June Moore, both...

Allitron, Inc., and Donovan, Ltd., are interstate competitors selling similar appliances, principally in the states of Illinois, Indiana, Kentucky, and Ohio. Allitron and Donovan agree that Allitron...

What problem may exist in determining the amount realized for an investor who exchanges common stock of a publicly traded corporation for a used building? How is the problem likely to be resolved?

Kathy left her classic 1978 Volkswagen convertible at Freddies Service Station, requesting a tune-up. When she returned that evening, Freddies bill was $374. Kathy stated that Firestone and Sears...

Three police officers, including Maria Trevizo, were on patrol in Tucson, Arizona, near a neighborhood associated with the Crips gang, when they pulled over a car with a suspended registration. Each...

Castle and Dorabella formed an S corporation; Castle owns 75% of the outstanding shares, and Dorabella owns the rest. When the entity's AAA balance is $1 million, it distributes an asset to each...

Central Maine Power Co. made a promotional offer in which it promised to pay a substantial sum to any homeowner or builder who constructed new housing heated with electricity. Motel Services, Inc.,...

Connie R. Grady purchased a new Chevrolet Chevette from Al Thompson Chevrolet (Thompson). Grady gave Thompson a down payment on the car and financed the remainder of the purchase price through...

Catherine Creteau and her husband contracted with a travel agency, Liberty Travel, Inc., to arrange a trip to Jamaica. While staying in Jamaica in accommodations arranged by Liberty Travel, they were...

Richard Schewe and others placed personal property in a building occupied by Winnebago County Fair Association, Inc. Prior to placing their property in the building, they signed a Storage Rental...

Ramon had AGI of $180,000 in 2014. He contributed stock in Charlton, Inc. (a publicly traded corporation), to the American Heart Association, a qualified charitable organization. The stock was worth...

Erica Bishop lived in public housing with her children. Her lease stated that only she and her children, who were listed on the lease, could live in the apartment, and that she was responsible for...

Lester purchased a used automobile from MacKintosh Motors. He asked the seller if the car had ever been in a wreck. The MacKintosh salesperson had never seen the car before that morning and knew...

Brown, located in Knoxville, contracted to buy sixty cases of Lovely Brand canned corn from Clark in Toledo at a contract price of $1,250. Pursuant to the contract, Clark selected and set aside sixty...

Kendall Gardner agreed to buy from B& C Shavings, a specially built shaving mill to produce wood shavings for poultry processors. B& C faxed an invoice to Gardner reflecting a purchase price of $...

You are the president of a large corporation which is in the business of manufacturing, among other things, chemical products used to eradicate termites. You have just reviewed a confidential report,...

Mac, an inventor, obtained a patent on a chemical process to clean old aluminum siding so that it can be easily repainted. Mac has a $50,000 tax basis in the patent. Mac does not have the capital to...

Sue exchanges a sport utility vehicle (adjusted basis of $16,000; fair market value of $19,500) for cash of $2,000 and a pickup truck (fair market value of $17,500). Both vehicles are for business...

What is the citation of a 1993 ALR annotation that discusses the admissibility of polygraph test results in an action for malicious prosecution? What Am. Jur. 2d evidence research references are...

Before Chad DeRosier could build a house on his undeveloped property, he needed to have some fill dirt deposited on the land. Utility Systems of America, Inc., was doing roadwork nearby, and DeRosier...

Garrett and his wife checked into the St. Louis Airport North Holiday Inn on March 29, taking advantage of the hotel's "Park and Fly" package, which provided one night of lodging to individuals,...

Briefly describe how the use of databases could help in detecting kickback fraud schemes.

The Caplans contract with Faithful Construction, Inc., to build a house for them for $ 360,000. The specifications state all plumbing bowls and fixtures . . . to be Crane brand. The Caplans leave on...

Moritz, a guest at Pines Hotel, was sitting in the lobby when Brown, a hotel employee, dropped a heavy vacuum cleaner on her knee. When Moritz complained, the employee insulted her and hit her with...

Joseph Gonzales recently bought a new business that included a small 20-room motel and coffee shop. He hired a young couple to run the business and plans to pay them a monthly salary. The couple will...

Rimma Vaks and her husband, Steven Mangano, executed a written contract with Denise Ryan and Ryan Auction Co. to auction their furnishings. The six- page contract provided a detailed summary of the...

Matulis, Inc., a C corporation, owns a single asset with a basis of $325,000 and a fair market value of $800,000. Matulis holds a positive E & P balance. It elects S corporation status and then sells...

Tata Consultancy of Bombay, India, is an international computer consulting firm. It spends considerable time and effort recruiting the best personnel from Indias leading technical schools. Tata...

Juan, an attorney, is the sole shareholder of Carmine Corporation, a C corporation and professional association. The corporation paid Juan a salary of $336,000 during its fiscal year ending September...

If China wished to slow Starbucks expansion, what legal barriers would be most helpful? How would these barriers affect Chinese consumers and businesses?

Owl is a closely held corporation owned by eight shareholders (each has 12.5% of the stock). Selected financial information provided by Owl follows. Taxable income ....................$6,250,000...

American Corporation has two equal shareholders, Mr. Freedom and Brave Inc. In addition to their investments in American stock, both shareholders have made substantial loans to American. During the...

Teresa, Peter, and Walker were partners under a written agreement made in January that the partnership should continue for ten years. During the same year, Walker, being indebted to Smith, sold and...

The Tufte family leased a 260-acre farm from the Travelers Insurance Co. Toward the end of the lease, Travelers mailed the Tuftes an option to renew the lease. The option arrived at the Tuftes house...

Multiply Choice 1. For consideration to exist, there must be: (a) A bargained-for exchange (b) A manifestation of mutual assent (c) Genuineness of assent (d) Substantially equal economic benefits to...

Sara transfers land (a capital asset) having a $30,000 adjusted basis to Temple Corporation in a Sec. 351 exchange. In return, Sara receives the following consideration: Consideration FMV 100 shares...

Allison, Keesha, and Steven each own equal interests in KAS partnership, a calendar year-end, cash-method entity. On January 1 of the current year, Steven's basis in his partnership interest is...

Defendant no. 1 parked his truck in the street near the bottom of a ditch on a dark, foggy night. Iron pipes carried in the truck projected nine feet beyond the truck in back. Neither the truck nor...

1. Using the categories discussed in the chapter, what type of negotiable instrument was the note that Durbin signed (an order to pay or a promise to pay)? Explain. 2. Suppose that the note did not...

Kenzie Godfrey, a college student majoring in physics, was a passenger in a taxi when it collided with a car driven by Dawn Altieri. Altieri had originally leased the car from G. E. Capital Auto...

The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On March 1, 2014, Jessica contributed land valued at $600,000 to the partnership in exchange for a 50%...

In the past, the rules of discovery were very restrictive, and trials often turned on elements of surprise. For example, a plaintiff would not necessarily know until the trial what the defendants...

The Allwardt Trust is a simple trust that correctly uses the calendar year for tax purposes. Its income beneficiaries (Lucy and Ethel) are entitled to the trust's annual accounting income in shares...

Did Porters statement that the spa was top of the line and the Cadillac of spas create any type of warranty? Why or why not? Shalene Kolchek bought a Great Lakes Spa from Val Porter, a dealer who was...

Robert Gutkowski, a sports marketing expert, met numerous times with George Steinbrenner, the owner of the New York Yankees, and other Yankees executives over a ten-year period to help launch the...

While driving his car in Virginia, Carpe Diem, a resident of North Carolina, struck Butt, a resident of Alaska. As a result of the accident, Butt suffered more than $60,000 in medical expenses. Butt...

Describe the book/tax difference resulting from each of the following transactions: a. Firm A spent $430 on a business dinner attended by the firms vice president and a potential client. b. Firm B...

Design Inc., in Newport, Rhode Island, entered into a contract with Buenavista, S.A. in Barcelona, Spain, to buy 1,000 sheets of stained glass. The contract contained a delivery clause that read FOB...

Padma Paper Mills, Ltd., converts waste paper into usable paper. In 2007, Padma entered into a con-tract with Universal Exports, Inc., under which Universal Exports certified that it would ship white...

Apricot Corporation distributes property ($125,000 basis and $150,000 fair market value) to its sole shareholder, Ellie. The property is subject to a liability of $200,000, which Ellie assumes....

Tabor is a buyer of file cabinets manufactured by Martin. Martins contract with Tabor calls for delivery of fifty file cabinets at $40 per cabinet in five equal installments. After delivery of two...

Mr. Higgins operated a used car dealership in the state of Alabama. Higgins purchased a Chevrolet Corvette. He paid for the car with a draft on his account at the First State Bank of Albertville....

Distinguish between taxpaying entities and flow-through entities from the standpoint of the federal income tax law.

Curtis is an executive on a business trip to the West Coast. He has driven his car on this trip and checks into the Hotel Ritz. The hotel has a guarded underground parking lot. Curtis gives his car...

Gils outside basis in his interest in the GO Partnership is $100,000. In a proportionate non-liquidating distribution, the partnership distributes to him cash of $30,000, inventory (fair market value...

James Fitl purchased a 1952 Mickey Mantle Topps baseball card from baseball card dealer Mark Strek for $17,750 and placed it in a safe deposit box. Two years later, he had the card appraised, and he...

J.A. Coghill owned a used Rolls Royce Corniche automobile, which he sold to a man claiming to be Daniel Bellman. Bellman gave Coghill a cashiers check for $ 94,500. When Coghill tried to cash the...

Damian Corporation is engaged in the business of purchasing and importing carpets from Iran. Importing these carpets from Iran is illegal. Following is a list of income and expense items for the...

Roberta Santos, age 41, is single and lives at 120 San-borne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husband, Wayne, for...

The U.S. pineapple industry alleged that producers of canned pineapple from the Philippines were selling their canned pineapple in the United States for less than its fair market value (dumping). The...

Shawna and David formed a partnership. At the time of the partnerships formation, Shawnas capital contribution was $ 10,000, and Davids was $ 15,000. Later, Shawna made a $ 10,000 loan to the...

Landlord owned a clothing store and agreed in writing to lease the stores basement to another retailer. The written lease, which both parties signed, (1) Described the premises exactly, (2)...

Rose Company owns Machine A (adjusted basis of $12,000 and fair market value of $15,000), which it uses in its business. Rose sells Machine A for $15,000 to Aubry (a dealer) and then purchases...

1. If the iPod is capable of playing at a certain level of sound, isnt it foreseeable that users would assume that a high level of sound was ordinary use? 2. If Apple did not provide the warning, how...

Cherry Corporation, a calendar year C corporation, is formed and begins business on April 1, 2015. In connection with its formation, Cherry incurs organizational expenditures of $54,000. Determine...

Fabrics International, Inc., bought a fabric design from an Italian designer and registered a copyright to it with the U. S. Copyright Office. When Macys, Inc., began selling garments with a similar...

Truck drivers for a hauling company, while loading a desk, found a $100 bill that had fallen out of the desk. They agreed to get it exchanged for small bills and divide the proceeds. En route to a...

The following actual fraud occurred in a communications company. What Ruth Mishkin did in her spare time didnt concern the Boca Raton, Florida, public relations firm where she worked very much. We...